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We will be using Cornell Note Taking Format Today! Money Money
Money! Money Money Money! One Step at a time to to Success in
Economics class!
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Unit Five: Learning Objectives: North Clackamas School District
Social Studies Priority Standards: Econ 46. Distinguish between
fiscal and monetary policies and describe the role and function of
the Federal Reserve.
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Lesson One: Daily Learning Target I Can define and explain in
writing the following key Economic concepts: The Three uses of
Money The Six Characteristics of Money
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Money is anything that is generally acceptable that serves as a
medium of exchange, a unit of account, and a store of value. What
Is Money?
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Barter goods and services were traded without the exchange of
money. However, before trade could occur, there had to double
coincidence of wants be a double coincidence of wants. E ach trader
had to have something the other wanted. Ill trade you a chicken for
a pair of shoes. I would love to sell you these shoes but I cant
eat chicken, due to my bad teeth, caused by smoking. barter
economychicken In a barter economy a chicken shoes farmer who wants
to buy shoes chickens may have to first trade chickens apples
apples for apples and then apples for shoes shoes because the guy
selling shoes apples shoes wants only apples. Money eliminates this
problem.
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pineapples broccoli Or, a heart surgeon might accept only
certain goods ( like pineapples ) but not others ( like broccoli )
b ecause he doesnt like broccoli. You are lucky you are a pineapple
farmer and not a broccoli farmer. I hate broccoli.
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. less expensiveIt is less expensive to use money. saves
timetime is moneyUsing money saves time and time is money.
calculation of exchangebartering The calculation of exchange by
bartering is calculation of exchange much slower than the
calculation of exchange monetary system in a monetary system. less
expensive It is less expensive to use money. calculation of
exchangefast and easy The calculation of exchange is fast and easy
because whatever the price is, you pay that amount.$3.00 Heres
$3.00 for one gallon.
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Money is also easier to tax. So a monetary system is better
than a barter system. T he m onetary system enables the calculation
of exchange to go much faster.
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The Three Uses of Money: Money as Medium of Exchange A medium
of exchange is anything that is used to determine value during the
exchange of goods and services. Money as a Unit of Account A unit
of account is a means for comparing the values of goods and
services. Money as a Store of Value A store of value is something
that keeps its value if it is stored rather than used.
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The coins, paper bills, or anything used as money in a society
is called currency. A currency must meet the following
characteristics: Durability Objects used as money must withstand
physical wear and tear. Portability People need to be able to take
money with them as they go about their business. Divisibility To be
useful, money must be easily divided into smaller denominations, or
units of value. Uniformity Any two units of money must be uniform,
that is, the same, in terms of what they will buy. Limited Supply
Money must be available only in limited quantities. `Acceptability
Everyone must be able to exchange the money for goods and services.
The Six Characteristics of Good Money:
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Commodity Money Commodity money consists of objects that have
value in themselves. Representative Money Representative money has
value because the holder can exchange it for something else of
value. Flat Money: Flat money, also called legal tender, has value
because the government decreed that is an acceptable means to pay
debts. The Sources of Moneys Value